What’s driving Chinese infrastructure investment overseas and how can we make the most of it?


Shahar Hameiri, The University of Queensland

Chinese infrastructure investment in Australia has rarely left the headlines lately. It’s reported that telecommunications giant Huawei will likely be banned from building Australia’s 5G network on national security grounds. Hong Kong-based company CK Infrastructure’s bid to buy APA Group’s gas pipeline network is also proving controversial.

Scrutiny of the national security implications of infrastructure has been upgraded. The new Critical Infrastructure Centre is assisting the Foreign Investment Review Board in this. Though not made explicit, the main focus is China.




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Explainer: why Chinese telecoms participating in Australia’s 5G network could be a problem


Greater scrutiny of investment projects is welcome, especially if community and environmental concerns are also considered. However, Australia could benefit from the availability of Chinese infrastructure financing.

Australia’s north has significant infrastructure needs. And in the major Australian cities, public transport systems are inadequate, leading to ever-longer commuting times. China also possesses world-class expertise in high-speed rail, which could be harnessed to better connect cities on the eastern seaboard.

Given the state of relations with China and Australia’s pressing infrastructure needs, the Australian government must develop a clear strategy for Chinese infrastructure investment. Instead of passively scrutinising bids, the government should proactively identify worthwhile projects and engage Chinese counterparts to finance and implement them.




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Australia risks missing out on China’s One Belt One Road


Belt and Road isn’t just a political ploy

A proactive approach could benefit Australia because Chinese infrastructure investment is not as strategically directed as many assume. This is clear if we examine the Belt and Road Initiative (BRI) – the centrepiece of China’s global infrastructure financing spree.

The Australian government, on security officials’ advice, has not joined the BRI. However, Belt and Road is not a carefully planned “grand strategy”. It is largely driven by the diverse activities of state-owned enterprises competing for projects and financing.

President Xi Jinping has undoubtedly used the BRI to signal China’s rise to “great power” status. But its main drivers are domestic and commercial. At its core, the BRI is an effort to alleviate China’s industrial overcapacity problem in key sectors, such as steel, glass, cement and aluminium.

Overcapacity has worsened since the global financial crisis, as Beijing sought to maintain growth by encouraging an infrastructure construction boom. State-owned enterprises (SOEs) spearheaded this. After profitable domestic opportunities had dried up, international expansion became attractive, to keep SOEs working and to find more productive outlets for China’s huge foreign currency reserves.




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The BRI’s implementation has reflected competition, lobbying and compromises among ministries, provinces and SOEs. Its masterplan document – “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road” – is a case in point. It contains 50 “priority areas”. These cover virtually every governmental and non-governmental activity, showing little actual prioritisation.

Early statements suggested a BRI focus on Central and Southeast Asia. But since 2015 the initiative has been formally opened to all countries. This was again due to intense lobbying from provinces, SOEs and some foreign governments. All are keen to get some of the action, suggesting little strategic direction.

The vague and loose Belt and Road plan has enabled considerable scope for interests within the Chinese party-state to use it for their own, economically motivated, agendas, with little consideration for Beijing’s wider diplomatic objectives. This has generated a rather chaotic, “bottom-up” process for selecting and funding projects.

Belt and Road project ideas usually emerge from state-owned enterprises’ in-country subsidiaries. After spotting an opportunity, they try to build support in the recipient government. Occasionally, this includes bribing officials. They also often seek to obtain the local Chinese embassy’s support to improve lobbying back home.

Once agreement with the recipient government is reached, the SOE or the recipient government applies for financing from China’s policy or commercial banks. The banks determine whether to extend credit after assessing repayment capacity. The central government’s involvement is typically limited to the National Development and Reform Commission’s formal approval.




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The Belt and Road Initiative: China’s vision for globalisation, Beijing-style


Australia still needs to manage the risks

Chinese infrastructure projects are not risk-free. The potential for misuse of key infrastructure to serve Chinese strategic agendas is clearly the Australian government’s foremost concern. But there are more immediate issues too.

Chinese banks’ lending standards are well below world “best practice”. They give limited consideration to social, environmental and labour protections when awarding financing to projects.




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China’s green planning for the world starts with infrastructure


Tough competition between Chinese companies means they have strong incentives to cut corners and promote projects that recipients do not need. The latter can be saddled with unnecessary infrastructure and potentially unsustainable debt. Furthermore, Chinese central agencies’ capacity to regulate SOEs’ offshore activities is weak, so they cannot be relied upon to manage these problems.

Closer scrutiny of investment proposals is, therefore, clearly necessary. So, too, is tight regulation of project implementation. Australian regulators should also ensure Chinese projects adequately resolve social, environmental and labour concerns.

The fragmented nature of Chinese investments provides opportunities, however, for selective engagement that could serve the wider public interest. This should form part of a clear Australian strategy towards China based on a nuanced analysis of both the threats and opportunities of this multifaceted relationship.


The Conversation


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Shahar Hameiri, Associate Professor of International Politics, The University of Queensland

This article was originally published on The Conversation. Read the original article.

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View from The Hill: China challenge is the issue of the moment in Australian foreign policy


Michelle Grattan, University of Canberra

Two contributions made in separate forums in Parliament House on Tuesday captured the sharp cross-currents in the China-Australia relationship.

At the Australia China Business Council’s “Networking Day”, Chinese ambassador Cheng Jingye reiterated that China “never interferes in the internal affairs of other countries”, let alone engaged in “the so-called infiltration of other countries”.

The ambassador delivered little-disguised criticism of Australia. To dispel “the clouds” over bilateral relations, “the two countries need to have more interactions and inclusiveness, with less bias and bigotry… less cold war mentality”.

Over in the Coalition party room Liberal senator David Fawcett, chairman of the parliamentary foreign affairs committee, also had a forthright message, urging the cabinet to put security concerns at the forefront in considering the Chinese company Huawei’s push for a slice of the action in the 5G network build.

The government’s attitude to China’s protestations that it doesn’t interfere is one of, “it would say that”. Its view of claims by non-state companies such as Huawei that they have no connections with the Chinese regime is much the same.

For both sides of politics, the China policy challenge is to strike the right balance in a bilateral relationship now infused with Australian suspicion and openly-expressed Chinese irritation.

If Labor wins the election Penny Wong, now shadow foreign minister, will be shouldering much of that responsibility.

In her speech at the business forum, Wong criticised the Turnbull government’s management of the relationship and said “a more considered, disciplined and consistent approach is required”.

So how would a Labor government handle things? Wong outlined six “operating principles” that it would use:

  • A clear understanding and articulation of Australia’s national interests, which included the country’s security and prosperity, regional stability and constructive internationalism.

  • Acceptance that we live in a disrupted world.

  • Acceptance of China “as it is, not as others might perceive China to be or as China itself might represent itself”.

  • Acknowledgement of how important and beneficial China’s emergence as a major economic power has been to Australia and the world.

  • Pursuit of an integrated approach to the many strands of the relationship.

  • A commitment to working constructively with China and others in a regional framework.

Australia and China were very different culturally, politically and socially, Wong said.

“The important objective is to prevent differences from becoming disagreements, as far as possible. And when disagreements do occur, they must be managed with intelligence and tact,” she said.

“To the extent possible, Labor will work towards ensuring that our political relationship works on the same basis as our economic relationship – respect and trust based on dialogue and understanding. Respect and trust don’t just happen. They have to be built and maintained, and that’s what we intend to do”.

Of course it is easier to say how things should be managed than to manage the often tricky realities.

In his address to the forum, Malcolm Turnbull did not dig down deeply to those realities. He kept his references to differences to the easier, less sensitive ones. “Sometimes you’ll get issues at a fairly granular level,” he said, and referred to the problem with imports of Australian wine. “We went to work to ensure that that could be resolved and indeed so it was”.

Turnbull also suggested the reality wasn’t always as it was portrayed. “Sometimes in the media there is always going to be an emphasis on differences, on conflict, on problems”.

It was a superficial speech – which can be defended on the grounds that it can create more trouble than it is worth to be too blunt in public about the actual problems. Also, Turnbull regarded it as a business occasion rather than one for a more formal foreign policy presentation.

The crack at the media was, however, a cheap and not very honest shot. The media is often simply saying publicly and directly what the government is saying privately or more obliquely. It’s notable that Andrew Hastie, Liberal chair of the parliamentary intelligence and security committee, recently put on record (under privilege) allegations against business figure Chau Chuk Wing, partly on the grounds of giving some backing to media outlets that are being sued over stories about him.

On other fronts this week, Huawei has been lobbying MPs to try to convince them it is as transparent as it claims, while Hastie’s committee is preparing its report on the legislation – which the government wants passed next week – for a register of agents of foreign governments and other foreign political interests.

The Australia-China relationship involves walls and whispers, as well as all the rhetoric about trust and respect.

Meanwhile the Lowy Institute’s annual poll, Understanding Australian Attitudes to the World, released Wednesday, suggests ordinary Australians are less galvanised by the China debate than the decision-makers.

“Australians remain remarkably sanguine about foreign interference in Australia’s political processes following the furore over Chinese-linked donations to Australian political parties, politicians, and institutions. Foreign interference remains a low-order threat in the minds of Australians, who are almost equally concerned about US influence as Chinese influence,” Lowy’s executive director Michael Fullilove writes in his introduction to the poll, done in March with a sample of 1200.

“Foreign interference in Australian politics” was seen as a “critical threat” by 41% – behind terrorism (66%), North Korea’s nuclear program (66%), climate change (58%), cyber attacks from other countries (57%), the prospect of a severe downturn in the global economy (50%), and the Trump presidency (42%).

Although the debate has been all about China, the poll found what concerns there were appear to be focused on foreign influence generally, rather than specifically Chinese influence. Asked about influence from both China and the US in Australia’s political processes, 63% expressed concern about China and 58% concern about the US.

In other findings relating to China

  • 72% said the Australian government was “allowing too much investment from China”. In 2014, the figure was 56%.

  • 46% believed it was likely “China will become a military threat to Australia in the next 20 years”.

  • But 82% said China was more of an economic partner to Australia than a military threat to it.

  • 81% believed it was “possible for Australia to have a good relationship with China and a good relationship with the United States at the same time”.

The ConversationIn their attitudes to China, the Australian public may be alert but they’re not alarmed.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Despite strong words, the US has few options left to reverse China’s gains in the South China Sea


Adam Ni, Australian National University

At a top regional security forum on Saturday, US Defence Secretary Jim Mattis said China’s recent militarisation efforts in the disputed South China Sea were intended to intimidate and coerce regional countries.

Mattis told the Shangri-La Dialogue that China’s actions stood in “stark contrast with the openness of [the US] strategy,” and warned of “much larger consequences” if China continued its current approach.

As an “initial response”, China’s navy has been disinvited by the US from the upcoming 2018 Rim of the Pacific Exercise, the world’s largest international naval exercise.

It is important to understand the context of the current tensions, and the strategic stakes for both China and the US.




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Is China playing a long game in the South China Sea?


In recent years, China has sought to bolster its control over the South China Sea, where a number of claimants have overlapping territorial claims with China, including Vietnam, the Philippines and Taiwan.

China’s efforts have continued unabated, despite rising tensions and international protests. Just recently, China landed a long-range heavy bomber for the first time on an island in the disputed Paracels, and deployed anti-ship and anti-air missile systems to its outposts in the Spratly Islands.

China’s air force has also stepped up its drills and patrols in the skies over the South China Sea.

While China is not the only claimant militarising the disputed region, no one else comes remotely close to the ambition, scale and speed of China’s efforts.

China’s strategy

The South China Sea has long been coveted by China (and others) due to its strategic importance for trade and military power, as well as its abundant resources. According to one estimate, US$3.4 trillion in trade passed through the South China Sea in 2016, representing 21% of the global total.

China’s goal in the South China Sea can be summarised with one word: control.

In order to achieve this, China is undertaking a coordinated, long-term effort to assert its dominance in the region, including the building of artificial islands, civil and military infrastructure, and the deployment of military ships and aircraft to the region.




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Explainer: what are the legal implications of the South China Sea ruling?


While politicians of other countries such as the US, Philippines and Australia espouse fiery rhetoric to protest China’s actions, Beijing is focusing on actively transforming the physical and power geography of the South China Sea.

In fact, according to the new commander of the US Indo-Pacific Command, Admiral Philip Davidson, China’s efforts have been so successful that it “is now capable of controlling the South China Sea in all scenarios short of war with the US”.

America’s declining relevance

China’s efforts are hard to counter because it has employed an incremental approach to cementing its control in the South China Sea. None of its actions would individually justify a US military response that could escalate to war. In any case, the human and economic cost of such a conflict would be immense.

The inability of the US to respond effectively to China’s moves has eroded its credibility in the region. It has also fed a narrative that the US is not “here to stay” in Asia. If the US is serious about countering China, then Mattis’ rhetoric must be followed by action.

First, the US should clearly articulate its red lines to China and others on the kinds of activities that are unacceptable in the South China Sea. Then it must be willing to enforce such red lines, while being mindful of the risks.

Second, the US needs to renew its efforts to cooperate with allies in the region to build capacity and demonstrate a coordinated commitment to stand in the face of China’s challenge.

Third, the US needs to deploy military capabilities in the Indo-Pacific region, such as advanced missile systems, which would reduce the military advantages gained by China through the militarisation of the South China Sea features.

Long-term consequences

China’s tightening control over the South China Sea is worrying for a number of regional countries. For many, the shipping routes that run through the South China Sea are the bloodlines of their economies.

Moreover, the shifting balance of power will enable Beijing to settle its territorial disputes in the region for good. Without a doubt, China is willing to use its new-found power to change the status quo in its favour, even at the expense of its weaker neighbours.

Control of the South China Sea also allows Beijing to better project its military power across South-East Asia, the western Pacific and parts of Oceania. This would make it more costly for the US and its allies to take action against China, for example, in scenarios involving Taiwan.

On a higher level, China’s assertive approach to the South China Sea demonstrates Beijing’s increasing confidence and its willingness to flaunt international norms that it considers inconvenient or contrary to its interests.

There is little doubt China is becoming the new dominant power in Asia. Its rise has benefited millions in the region and should be welcomed. But we should also be wary of Beijing’s approach to territorial disputes and grievances if it employs military and economic intimidation and coercion.




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China’s quest for techno-military supremacy


If we want to live in a “world where big fish neither eat nor intimidate the small”, then there must be consequences for countries, including China, when they flaunt international norms and seek to settle disagreements with force.

It may be too late to turn the tide in the South China Sea and reverse China’s gains. No one would run such a risk. But it is not too late to impose penalties on China for further destabilising the region through its actions in the South China Sea.

The ConversationThe challenge is to figure out how to do that, and what we would be willing to risk to achieve it.

Adam Ni, Researcher, Strategic and Defense Studies Centre, Australian National University

This article was originally published on The Conversation. Read the original article.

Australia needs to reset the relationship with China and stay cool



File 20180601 69493 pi0fsy.jpg?ixlib=rb 1.1
In happier times: Prime Minister Malcolm Turnbull talks with Chinese President Xi Jinping at the 2017 APEC summit in Vietnam.
AAP/STR

Tony Walker, La Trobe University

Let’s call it the “China syndrome”. This describes a condition that is a bit compulsive and not always rational.

Australia’s response to China’s continuing rise mixes anxiety, even a touch of paranoia, with anticipation of the riches that derive from the sale of vast quantities of commodities.

Economic dependence on China is two-edged and potentially policy-distorting.

To put this in perspective: Australian exports of goods and services to China in 2016-17 were worth $110.4 billion. That accounts for nearly 30% of total exports. This compares with $20.8 billion for the US, or 5.16% of total exports. The EU (including the United Kingdom) accounted for $30.5 billion, or 9.8%.

In other words, nearly one-third of Australian goods and services trade is hinged to the China market. Putting it mildly, such a level of dependence on a single market is not ideal.




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No other country, relatively speaking, has benefited to quite the same extent from China’s extraordinary development since it began opening for business to the outside world after the Third Plenary Session of the 11th Central Committee of 1978 of the Chinese Communist Party (CCCP).

In 2017, Australia registered the longest uninterrupted stretch of economic growth in modern history. This surpassed previous record holder the Netherlands with 103 uninterrupted quarters.

That expansion continues. Australia’s commodities exports, driven by Chinese demand, sustain unparalleled growth.

This is the context in which Australia might do a better job managing relations with its cornerstone trading partner and, arguably, its most important bilateral relationship.

This latter observation requires a leap beyond assumptions that security ties with the US mean there is no relationship more critical to Australia’s wellbeing.

That is changing fast as China’s economic might continues to expand and its ability to project military power in the Asia-Pacific grows in leaps and bounds.

None of this is to say that Australia’s security arrangements with the US versus China’s rise represent a zero-sum game. You could argue that security ties to the US have become more important as a consequence. It is simply to acknowledge the world has changed. It is sprinting ahead of the ability of policymakers to keep up.

Take the 2017 Foreign Policy White Paper, for example. Formulated over the period 2016-2017, the paper asserted the need for Australia to bolster its relationship with the US to take account of China’s rise.

On the other hand, and unavoidably, it acknowledged that the Asia Pacific is no longer uncontested space.

As the paper puts it:

Powerful drivers are converging in a way that is reshaping the international order and challenging Australia’s interests. The United States has been the dominant power in our region throughout Australia’s post-second world history. China is challenging America’s position.

Those “powerful drivers” have become more powerful since publication of the white paper.

At the same time, Australian policy towards Beijing has become more ragged, driven by worries about the impetus of China’s rise, concerns about America as a reliable ally under an “America First” Trump administration, and fears about Chinese influence in Australia itself.

Unfortunately, Prime Minister Malcolm Turnbull’s response to the latter became enmeshed in domestic politics, leaving the impression the new laws to forestall foreign interference in Australian democratic processes were aimed at China alone.

Between December 7 and 9, 2017, Turnbull said on three separate occasions Australia had “stood up” against outside attempts to interfere in its internal affairs. This was a pointed and, as it turned out, unwise use of the phrase.

On the last occasion, he said it in Chinese, adding offence to Beijing where such phraseology – “the Chinese people have stood up” – has sacred meaning in Chinese Communist Party history. This was the expression Mao Zedong used when proclaiming the People’s Republic in 1949, after decades of foreign interference, including the deaths of hundreds of thousands of Chinese at the hands of the Japanese.

Turnbull’s intervention raises questions about the quality of China policy advice from his own office.

Foreign Minister Julie Bishop had, in any case, irritated Beijing in a speech delivered in Singapore in March, 2017, in which she questioned China’s political model.

While non-democracies such as China can thrive while participating in the present system, an essential pillar of our preferred order is democratic community.

Bishop might have phrased her remarks aimed at “non-democracies such as China” more judiciously, while conveying a similar message.

What is lacking in Australia’s approach to its relationship with China is consistency, so the government speaks with one voice and, where possible, separates domestic politics from the conduct of China policy.

Beijing values consistency. It may not like forthrightness in defence of Australia’s legitimate interests in maintaining its own sovereignty and its own security, but it respects firmness.

Canberra should not shy away from articulating its concerns about China’s continued militarisation of facilities in the South China Sea. It should be on guard in withstanding Chinese efforts to interfere in domestic politics.

Policymakers should bear in mind a simple rule of thumb in dealing with China. It will seek to get away with what it can. That includes bullying and bluster.

Peter Drysdale, emeritus professor of economics at the Australian National University and author of a study of the Australian-Chinese economic relationship, told me the government needs to assert its “control of the China agenda”. This has been pushed off course in the recent past.

Drysdale perceives a “structural problems” embedded in the Australia-China relationship arising from “accelerated complications” in US-China relations. At the same time, Washington’s security establishment is pushing an alarmist viewpoint about China’s regional ambitions.

No reasonable observer pretends China’s impulses are benign. The question is how to manage, in a way that is not counter-productive, China’s attempts to spread its influence.

In Drysdale’s view, the greatest risk for Australia is that an erratic Trump administration will undermine a rules-based international order critical to Australian security.

Canberra’s diplomatic efforts over many years have been aimed at drawing Beijing into a rules-based system, promoting certainty in China’s behaviour as a “responsible stakeholder”.

That longstanding impulse of Australian foreign policy is now under stress.

However, what also needs to be kept in mind is that relations between Canberra and Beijing have had their ups and downs over the years. These blips have come and gone.




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Why China’s ‘debt-book diplomacy’ in the Pacific shouldn’t ring alarm bells just yet


The question is whether these latest tensions are more serious and lasting than others such as the chill that occurred after the 1989 Tiananmen Square massacre. Or frictions that accompanied Australia’s support in 1996 for the dispatch of US naval forces into the Taiwan Straits after Chinese missile tests during the Taiwanese election.

The Australian government needs a reset of the relationship that would move the two countries past a difficult stage caused by a combination of misunderstanding and loose talk.

Australian officials also need to bear in mind that, in a region in flux, Australia’s Asian neighbours are accommodating themselves to new realities at warp speed. Old certainties such as the validity of US security guarantees are being questioned.

The ConversationThe Turnbull government is operating in a much-changed environment. Stakes are high. Levels of anxiety about China’s rise are unlikely to fall. Australia needs to keep its cool and avoid falling prey to a China syndrome characterised by unsteadiness and poor judgement.

Tony Walker, Adjunct Professor, School of Communications, La Trobe University

This article was originally published on The Conversation. Read the original article.

New Zealand’s Pacific reset: strategic anxieties about rising China



File 20180529 80633 82w0rq.jpg?ixlib=rb 1.1
As China is extending its influence in the South Pacific, New Zealand has responded with increased aid for the region.
from http://www.shutterstock.com, CC BY-SA

Reuben Steff, University of Waikato

China’s expanding influence is complicating strategic calculations throughout the Asia-Pacific region.

Small states, dependent on maintaining high levels of trade with China to secure their prosperity, are loathe to criticise or take actions that Beijing could find objectionable. This is creating a dilemma over how small states can protect their national interests at a time when China’s growing influence threatens the status quo.

New Zealand illustrates this dynamic. It watches China extend its influence into the microstates of the South Pacific, a region where New Zealand (and its ally Australia) have long enjoyed a position of prominent influence.




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New Zealand’s Pacific reset

The South Pacific is a geographic region encompassing 16 independent nations (and a number of associate nations and dependencies). The majority of these are microstates that face an array of economic, social and governance challenges and are vulnerable to natural disasters.

The two largest and most prosperous states by a fair margin are Australia and New Zealand. Historically, they have been the most dominant and influential players in the South Pacific.

Earlier this month, New Zealand’s minister of foreign affairs and trade, Winston Peters, announced his government would spend an additional NZ$714 million over four years on international aid, with the majority going to South Pacific nations. Peters explained that New Zealand’s interests in the region stem from its common Pacific identity, the desire to forge a path of shared prosperity and to uphold New Zealand’s national security that, he added, “is directly affected by the Pacific’s stability.”

Peter’s announcement of increased funding added substance to a speech he delivered to the Lowy Institute in Sydney in early March where he committed New Zealand to “shifting the dial” on its foreign policy approach towards the South Pacific. What went unstated – but was made unmistakably clear in Peter’s speech – was the increased role China is playing in the South Pacific and how this is “changing New Zealand’s relative influence”.

Rising China, growing anxieties

Long overdue, the New Zealand government’s renewed push is a soft-power response to a mounting dilemma that small states face in the Asia-Pacific region. In essence, as China’s power grows, it is leading Beijing to extend its influence into virtually every corner of the wider Asia-Pacific region. In the South Pacific, this influence is being secured through aid, loans (creating debt South Pacific states may be unable to pay off) and building projects.

For a region comprised of fragile economies, China’s aid and loans can help bolster economic prospects. Yet, at the same time, China’s engagement is not selfless. A number of strategic interests drive it. As China builds out its blue-water naval capabilities, there are concerns that it may seek a military foothold in the region.

In March, reporting in Australia cited unnamed sources claiming that China was seeking an access agreement to dock its naval ships in Vanuatu in lieu of establishing a permanent military presence. Both China and Vanuatu denied this claim. True or not, reporting such as this taps into a heightened level of strategic anxiety New Zealand and Australian officials are experiencing.




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Given China’s ongoing militarisation of the South China Sea and Beijing’s rejection of the Hague Arbitral Tribunal’s ruling in July 2016 against China’s expansive nine-dash-line territorial claims, New Zealand officials could be forgiven for raising questions over China’s long-term intentions in the South Pacific.

Dilemma facing New Zealand

The New Zealand government does not seek to exclude China from the South Pacific. In fact, it has looked to collaborate with Beijing where it can. The Tripartite Cook Islands/China/New Zealand Water Project is an example of this, but the reset is clear evidence of Wellington’s desire to secure a role in the region as Beijing increases its influence. Yet, at this stage, New Zealand’s decision makers are acting as if there is very little they can do beyond responding with soft power in the form of increased aid and appeals to a common identity.

Ultimately, the constraints facing small states like New Zealand stem from their structural position relative to China, defined by an immense discrepancy in material resources. In short, China is an economic behemoth that, except for the United States, dwarfs every other country in the Asia-Pacific region.

While China is extremely important to the continued economic growth of small states in the Asia-Pacific, for Beijing these small states are relatively insignificant to its own economic fortunes. This gives China a potent lever to influence, compel and coerce states that draw its ire.

Larger economies such as the US and Japan have more room to manoeuvre vis-à-vis China’s increasing influence. Small states like New Zealand are walking a tight rope, lest they adopt positions Beijing finds regrettable and reduces or interferes with its trade.

For example, in 2010, Beijing froze political ties with Norway for awarding Chinese dissident Liu Xiaobo the Nobel Peace Prize. Negotiations over a free trade deal restarted only in 2016. South Korean companies were punished when their government agreed to purchase US missile defence systems.

What now for New Zealand?

Recognising New Zealand’s structural position is not to suggest it is powerless in the face of China’s expanding influence in the South Pacific. However, it is all but certain that China’s regional influence will continue to grow at the expense of the influence New Zealand and Australia hold. Decisions will need to be made as to how New Zealand calibrates its foreign policy with this in mind.

One option would be to consider how great New Zealand’s dependence on China truly is. How resilient would New Zealand’s economy be if trade with China were to decrease? According to one report, New Zealand’s economy would be vulnerable but more resilient than others in the region.

The ConversationUltimately, balancing China in the South Pacific will require greater coordination with Australia – still the Pacific’s largest donor – and reaching out to other states. Japan, South Korea and the US share concerns about China chipping away at their relative influence. However, Beijing could interpret increased collaboration with larger powers as a sign of regional containment of its growing influence. New Zealand could find itself punished in such a scenario, but running that risk may eventually become unavoidable.

Reuben Steff, Lecturer in International Relations and Security Studies, University of Waikato

This article was originally published on The Conversation. Read the original article.

Megaphone diplomacy is good for selling papers, but harmful for Australia-China relations


Wanning Sun, University of Technology Sydney

The issue of China’s influence in Australia is complex. It ranges from worries about national security, political donations and media infiltration to concerns about scientific collaborations, Confucius Institutes, the patriotism of Chinese students, and allegiance of the Chinese community. The most recent trope is China’s so-called “debt trap” diplomacy with Australia’s neighbours in the Pacific.

But there’s a simple reason this anxiety about China’s influence is so vexed. For the first time in history, Australia has had to deal with a world power that is not, as longtime defence analyst Hugh White puts it, “Anglo-Saxon”, and is not a liberal democracy. To quote The Australian’s Dennis Richardson in relation to China and the US: “Australia is friends with both, ally of one”.

The media in both countries have played a significant role in inflaming tensions, as well. Increasingly, China is cast in an adversarial light in the Australian media, and vice versa with Australia in the Chinese media.

There is less and less space for journalists who try to put forth an objective opinion and for commentators who attempt to steer the debate in a more rational and less visceral direction. Each side feels the need to simplify its message and take an increasingly radical position.

War of words

Of course, the media narratives in both countries need to be considered in the context of the rise of political populism globally — particularly the triumph of President Donald Trump in the US and Brexit in the UK.

Australia has a free but financially struggling media. This makes for a tricky combination. Take a media sector that is desperate to boost its readership, combine with a populist turn in the political discourse, add a generous dash of fear of China’s growing global power, and stir. The result, while great for sound bites and political posturing, is not a pretty picture, but it does make a good story.

Some commentators argue the public debate about Chinese influence in Australia tends to be dominated by hawkish voices who favour close ties with the US. This strident position runs counter to the diplomatic, business and university communities, who argue for a more culturally sensitive and constructive engagement with China.

To the anti-China hawks, concerns for Australia’s multicultural harmony and social cohesion are secondary.




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Meanwhile, China’s extensive soft power ambitions to improve the country’s appeal on the international stage also seem to have been moved to the backburner when it comes to Australia. The charm offensive is no more; it’s now just plain offensive.

Populism also reigns supreme in China, although in different ways. The tighter and wider the scope of the Communist Party’s political control, the less space there is for dissenting voices, and the more fertile the ground becomes for nationalistic discourses to flourish.

In fact, in an increasingly repressive environment of control and censorship, nationalism is the only populist game in town if you want to make a profit.

Over the past two years, the Chinese state media’s reaction to Australia has shifted from indifference to bemusement, and now to anger. This change in tone is evidenced in an article in the Global Times last year:

Australia poses a problem for China. If we mind its silly carryings-on, it will deplete our energy, and it doesn’t seem worth our while; however, if we leave it be and pretend nothing is happening, that would only encourage it, and it may go from bad to worse. Australia is one of the countries that have benefited most from China’s rise, yet it is also one of the most provocative voices in the Western bloc. It is beginning to look like a piece of chewing gum stuck to the bottom of China’s shoe.

The Global Times is a subsidiary newspaper of the Chinese government’s mouthpiece People’s Daily, but unlike People’s Daily, it is profit-driven and licensed to drive sales by pandering to populist sentiments rather than to reason.

The question is whether the Australian media should take the bait, trade insults with The Global Times, and allow such visceral responses to shape the debate.




Read more:
When it comes to China’s influence on Australia, beware of sweeping statements and conflated ideas


There are signs the Australian media are not only taking the Global Times seriously but also literally.

In fact, so literally that if you enter the current China debate in Australia and critique some aspect of the anti-China rhetoric — and then get quoted favourably (and possibly out of context) by The Global Times — you may automatically qualify for being labelled a Beijing apologist.

Impact on relations

Can this kind of sustained war of words have an actual impact on how the two countries view one another? Yes, it can.

One only need look at the recent rhetoric of top government officials in both countries as an example. Last year, Prime Minister Malcolm Turnbull vowed to “stand up” to China in an unusually sharp statement, while Foreign Minister Julie Bishop made a blunt assessment of China’s lack of democracy. China’s Foreign Minister, Wang Yi, just last week told Bishop that Australia needs to remove its “tinted glasses”.

Anecdotally, I’ve been told by some of my Chinese-Australian friends that their friends and families in China are repeatedly urging them to “stay safe” and “take care of themselves” as Australia becomes more anti-Chinese.




Read more:
Australians working in China should expect fallout over questions of political interference


But are Australia-China relations really as bad as the media have been making them out? If you look at the current number of Chinese tourists and students here, maybe the answer is no, or at least not yet. But the business community has already started to suffer.

As recently as two years ago, both countries were hoping to use their respective media to promote public diplomacy towards each other. At the moment, media organisations in neither country are doing that. In fact, public diplomacy has well and truly been replaced by megaphone diplomacy, specialising in what The Guardian’s Katherine Murphy calls “binary and cartoonish talk and analysis”, as is often found in the “graphic novel” genre.

The ConversationThe question we should be asking is not whether the relationship between Australia and China is as bad as the media in both countries portray it. Rather, it’s how much power the media has in shaping this relationship, and whose interests this current megaphone diplomacy is serving.

Wanning Sun, Professor of Chinese Media and Cultural Studies, University of Technology Sydney

This article was originally published on The Conversation. Read the original article.

Rewriting history in the People’s Republic of Amnesia and beyond


Louisa Lim, University of Melbourne

This article is part of the Revolutions and Counter Revolutions series, curated by Democracy Futures as a joint global initiative between the Sydney Democracy Network and The Conversation. The project aims to stimulate fresh thinking about the many challenges facing democracies in the 21st century.


Buried at the end of the most important Chinese political speech in a decade, President Xi Jinping’s 66-page address to the 19th party congress in November 2017, was one short line: “The Chinese Dream is a dream about history, the present, and the future.” Tired after 71 ovations over three-and-a-half hours, the audience may have missed this sentence. Yet it illuminates how history underpins President Xi’s “Chinese Dream” of national rejuvenation.

History plays an increasingly important legitimising role in China. As historian Antonia Finnane writes:

Every country has its national myths, most of which are grounded in or derived from history; but in China, history alone is the bedrock. The People’s Republic doesn’t have a religion, and it doesn’t have a constitution – or at least, not one that counts. It no longer even has a revolutionary ideology. It just has history, lots of it.

For the Chinese Dream to be achieved, it is imperative – as the president himself has spelled out – to ensure people “have correct views on history”. Certain episodes – the Chinese resistance to the Japanese in the 1930s and the second world war – can be remembered. Others, like the brutal 1989 crackdown in the streets leading up to Tiananmen Square in Beijing, which has just been removed from the new secondary school history curriculum in Hong Kong, must be forgotten.

The enforcement of forgetting

The French historian Ernest Renan said:

Forgetting … is a crucial factor in the creation of the nation.

In contemporary China, it’s put into practice with surgical skill. Specific memories of events deemed sensitive by the state are not just forgotten, they are winnowed out and selectively deleted. The Communist Party has succeeded in hacking the collective memory.

National amnesia has become what Chinese writer Yan Lianke calls a “state-sponsored sport”. And as Beijing’s global influence rises, its controlling instincts – to tame, to corral, to shape, to prune, to expurgate history and historical memory – are increasingly being exported to the world.

The first move was an attempt in August 2017 to bully Cambridge University Press into removing online access in China to 300 articles from the China Quarterly journal. These were pieces on topics deemed sensitive, such as the Cultural Revolution and the Tiananmen crackdown.

The publisher at first bowed to Chinese demands and only reversed its position after public backlash. But statements by the Journal of Asian Studies, Critical Asian Studies and Springer Nature indicate that this case is part of a larger campaign.

Chinese censorship has also made inroads into Western publishing houses. For instance, Springer Nature, which publishes Nature and Scientific American, deleted around 1,000 articles from its Chinese website, citing “local distribution laws”. In doing so, Western academic presses end up serving the CCP’s purpose by propagating only state-mandated “correct views of history” inside China, as if no alternatives exist.

Protesters injured in the 1989 crackdown begged the photographer ‘Tell the world!’ Today’s it’s a crime to commemorate the dead.
Courtesy Kim Nygaard, Author provided

China is also censoring its own archives, as work by Glenn Tiffert has forensically uncovered. His comparison of electronic and paper versions of China’s legal journals found that in one journal 87% of the page count had been excised.

At home, Beijing’s tightening grip on history deigns not only what can be remembered, but also the manner in which it can be marked. In the case of the events of June 4 in Tiananmen Square, small-scale commemorations that once flew beneath the radar are now regularly punished, often through vague charges such as “picking quarrels and stirring up trouble”.

Every year, Chinese activist Chen Yunfei had paid his respects at the grave of Wu Guofeng, a 20-year-old student who was shot and bayoneted to death by troops in Beijing on June 4, 1989. In March 2017, Chen was sentenced to four years in jail for this simple act of remembrance.

Chen’s lawyer Sui Muiqing told me:

June Fourth is a red line for the authorities that cannot be crossed. This was a very important reason. It was a catalyst for his arrest.

Last year, at least 16 people were detained for public acts of commemoration. Four other activists face up to 15 years in prison after being indicted for “inciting subversion of state power” for selling liquor with a label referencing June 4 and Tank Man.

A lone man stops a column of tanks in Tiananmen Square the day after the military suppressed protests by force.

The paradox, of course, is that the harder the Communist Party works to erase the memory of June 4, the deeper its obsession with Tiananmen’s legacy becomes. As Madeleine Thien wrote:

One could say that no one remembers the Tiananmen massacre more faithfully, or with greater attentiveness, than the Chinese government.

The crime of rejecting the revolution

An old term that came to prominence in the white terror after Tiananmen is also back in vogue: historical nihilism, or “rejecting the revolution and denying the historical inevitability of socialism”. In April this year, a law was passed that bans the slander of Communist Party heroes and revolutionary martyrs. Last week, prosecutors used this new law for the first time, against a man in Jiangsu province who used social media to criticise a fireman who died during a rescue operation.

A precursor of these new laws went to trial in 2016 when writer Hong Zhenkuai questioned elements of the patriotic war story, “The Five Heroes of Langya Mountain”. This recounts the self-sacrifice of a group of Chinese soldiers who threw themselves from a cliff to avoid capture. Hong questioned whether two of the soldiers may have simply slipped and fallen by mistake.

Hong was found guilty of libel and forced to make a public apology after the court ruled that he had damaged the solders’ “heroic image and spiritual value”. The court argued that Hong should not have disputed the validity of the well-known story precisely because it “constituted part of the collective memory of the Chinese nation”.

Chinese writer Hong Zhenkuai, convicted by a court for challenging the war story Five Heroes of Langya Mountain, climbs a peak to defend his position.

Many mainland historians and activists warn that the charge of historical nihilism could be used to muzzle historical research, using the threat of lawsuits to shut down discussion and ensure that the authorities’ view of history remains the only one.

“They want to use falsified history as propagated by the authorities to replace real history for the people,” Sui Muqing said. “They want to erase real historical events that happened. That’s what so-called ‘historical nihilism’ means.”

Even literary works are being targeted as guilty of historical nihilism. The Chinese government has denounced Soft Burial, a novel by Fang Fang about the excesses of the 1950s land reform movement, as a “poisonous weed” and banned its sale. Fang Fang explains the title, writing:

When people die and their bodies are buried under the earth without the protection of coffins, this burial is called a ‘soft burial’; as for the living, when they seal off their past, cut off their roots, reject their memories, either consciously or subconsciously, their lives are soft buried in time. Once they are in a soft burial, their lives will be disconnected in amnesia.

In today’s China, exhuming or even publicly remembering history – even events that happened within our lifetime, such as those of 1989 – is increasingly costly. Soft burial has become not just a reality, but a state of self-preservation.

“In the future, historical research will be impossible,” warned Hong in an open letter. He had previously worked as the chief editor of Yanhuang Chunqiu, a gutsy magazine that addresses Communist Party history. “If you point out the contradictions or holes in what they say, they can use the law to proclaim that you are guilty.”

President Xi has even published a book titled History: the Best Textbook. Yet only one version of history is acceptable: the Communist Party’s own.

The global spread of China’s amnesia

With China’s rise, it now finds itself in a position to amplify its version of history to a global audience. Following the 2017 meeting in Mar-a-Lago between Xi Jinping and US President Donald Trump, Trump described his conversation to The Wall Street Journal:

He then went into the history of China and Korea. Not North Korea, Korea. And you know, you’re talking about thousands of years … and many wars. And Korea actually used to be part of China.

Such a distorted reading is in line with a growing body of nationalist thought in China.

Increasingly, Beijing is marshalling its own version of history to support its territorial claims overseas. This is the case, for instance, of the Nine-Dash Line, which China says gives it a historical claim to virtually the entire South China Sea. China has refused to accept the Hague-based international tribunal’s ruling that this claim has no legal basis. Disgraced Australian politician Sam Dastyari even echoed the “thousands of years of history” line to back China’s refusal to abide by these rulings.

Recently, a map dating from 1951 has been uncovered. It is being used by researchers to propose new boundaries, though it is not clear whether Beijing could adopt them.

China has also invoked history to legitimise its massive One Belt One Road international infrastructure scheme, despite critics claiming that its premise relies on mythologised history.

The Chinese Communist Party is actively trying to export its version of the past beyond its borders. But these examples should serve as a warning. If Beijing is given a free pass on history, the international ramifications could come back to bite us in the years ahead.


The ConversationLousia Lim is the author of The People’s Republic of Amnesia: Tiananmen Revisited (OUP 2014).

Louisa Lim, Senior Lecturer in Audiovisual Journalism, University of Melbourne

This article was originally published on The Conversation. Read the original article.

View from The Hill: Hastie and Turnbull – what you don’t know, you can’t stop


Michelle Grattan, University of Canberra

There’s one logical reason why ambitious young Liberal backbencher Andrew Hastie didn’t tell Malcolm Turnbull he was about to drop a bombshell, with a parliamentary speech accusing a Chinese-Australian figure of involvement in the bribery of a United Nations official.

If he had forewarned Turnbull, Hastie – who is head of the parliamentary joint committee on intelligence and security – would have been firmly ordered to button his lips.

Remember, Turnbull was angry when a backbencher defiantly produced a private member’s bill on the live sheep trade. That was a tame gesture of independence compared with Hastie’s action.

The fact that Tuesday night’s speech was delivered has shocked the government, and it will add to China’s ongoing angst towards Australia.

The speech contained much context and detail but in summary, Hastie told parliament that Chau Chak Wing, an Australian citizen whom he described as having “extensive contacts in the Chinese Communist Party”, had “co-conspired to bribe the president of the United Nations General Assembly, John Ashe” in 2013.

“For reasons that are best undisclosed, the United States government did not seek to charge [Chau] for his involvement in the bribery of John Ashe,” Hastie said.

Chau had “been a very significant donor to both of our major political parties. He has given more than $4 million since 2004. He has also donated $45 million to universities in Australia,” Hastie said.

The claims against Chau had previously been reported in the Australian media; there are now defamation proceedings underway.

For his speech, Hastie drew on a briefing he received when he recently led a delegation to the United States to discuss the federal government’s espionage and foreign interference legislation – legislation that has particularly aggravated China. In the course of his speech Hastie tabled US documents.

In explaining his motives, Hastie cited national interest and democratic traditions, including press freedom. He said that “in Australia it is clear that the Chinese Communist Party is working to covertly interfere with our media and universities and also to influence our political processes and public debates.”

Turnbull, saying he only heard about the speech after it was delivered, told parliament that the US briefing – which he said was attended by at least one Labor MP – wasn’t classified. Asked whether he had “sought information from our intelligence agencies about the implications of publicly sharing the details of an FBI investigation which has been provided by our ally,” Turnbull said he had.

Labor is critical of Hastie. Frontbencher Anthony Albanese accused him of “probably rogue actions” and questioned his release of information received in the US briefing.

The speech flushed out Chau. His lawyer on Wednesday issued a statement saying Chau was “very disappointed that an elected representative would use the cover of parliamentary privilege to repeat old claims and attack his reputation just weeks before some of these matters are tested in court.

“Mr Hastie purports to be acting in the interest of Australians. It seems he has forgotten or disregarded the right all Australian citizens have to a presumption of innocence unless proven otherwise. Our client has not been charged with any offence which makes Mr Hastie’s attack all the more extraordinary,” the statement said.

Hastie’s action was highly unusual as well as controversial. Members, and especially the chair, of this bipartisan parliamentary committee, which considers legislation relating to security and receives a good deal of confidential information, have usually been very discreet in their public comments.

Even apart from the Hastie affair, this has been a testing week in the Australia-China relationship.

After Foreign Minister Julie Bishop met China’s Foreign Minister Wang Yi on the margins of a G20 gathering in Argentina (they actually had two sessions, one informal, the other formal) the tone from the two sides was very different.

Bishop’s take was all about how “very warm and candid and constructive” the discussions had been. The Chinese version was blunter: Wang Yi had said Australia needed to “take off its tinted glasses to look at China’s development from a more positive angle.”

An extreme version of China’s state of mind came in an editorial in the Global Times, a state-owned fiercely nationalistic publication.

It was a rant, suggesting actions against Australia on the trade front, and indicating Turnbull could usefully stay away from visiting China for “a few years”.

“Since the beginning of this year, Australia has revealed a friendly attitude on a few occasions in apparent attempts to soothe China relations. However, it is necessary for China to leave Australia hanging for a while, instead of being too quick to bury the hatchet whenever China tries to put a smile on its face,” the editorial said.

That was written before the Hastie speech.

In an address on Wednesday titled “Australia’s Deepening Economic Relationship with China: Opportunities and Risks”, Reserve Bank Governor Philip Lowe had a message about getting on.

Lowe reiterated that the deepening of our economic relationship with China had greatly benefited Australia – and also benefited China. “This means that both countries have a strong interest in managing this important relationship well. It is in our mutual interests to do this.

“Together, we can also be a strong voice for the importance of an open international trading system and for effective regional cooperation,” Lowe told the Australia-China Relations Institute in Sydney.

“We will, of course, have differences from time to time, but we will surely be better placed to deal with these if we understand one another well.

“Building strong connections across business, finance, politics, academia and the community more generally is important to deepening this understanding,” he said.

The ConversationBut in an increasingly complex relationship, understanding one another well can involve all sorts of challenges.

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

What’s at stake in the tariff negotiations between the US and China


Yixiao Zhou, Curtin University and Rod Tyers, University of Western Australia

The United States and China have put on hold plans to place tariffs on exports, in an effort to avoid a trade war. Our analysis shows just how important these negotiations are, with the impact of trade wars adversely affecting both economies and others like Australia.

The threat of a trade war started when US President Donald Trump announced 25% tariffs on Chinese imported electronics, aerospace products, and machinery. China retaliated hours later and announced 25% tariffs on US exports to China.




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The China-U.S. conflict is about much more than trade


Now both sides are agreeing to take “measures to substantially reduce the United States trade deficit in goods with China” and to work on expanding trade and protecting intellectual property.

We modelled a number of scenarios showing all increases in US or Chinese protection would cause international trade, and the global economy more generally, to shrink. We also find interest rates would rise everywhere and the Australian dollar would depreciate.

China and US trade would then fall by between a quarter and a third, depending on whether the tariffs are hiked unilaterally or bilaterally. Australia’s lucrative exports to China would also fall as US demand for China’s goods fall and China requires smaller quantities of Australian goods to produce them.

Because Australia is a small, open economy that is strongly influenced by developments abroad, the impacts of rising protectionism can be as large here as they are in the US and China.

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We found if US imposed tariffs but there was no retaliation abroad, the rise in tariff revenue would provide relief for the US economy and that this would raise the after-tax incomes of Americans even though US GDP would fall. However, we found after-tax incomes would fall everywhere else.

If China retaliated to the tariffs, all countries and regions would suffer losses, with Australia’s net loss among the largest, in per capita terms. The effects on China would be the largest, relative to their current disposable income. Because China would suffer the largest proportional loss of welfare, their government would have the strongest incentive to negotiate.

We expect any initial effects of tariffs on both sides to be slight, in small part this is because it will cause trade to be diverted to and through other countries. Because trade is likely to leak around the new protectionist barriers, the US and China could choose to impose the protection on imports from all countries.

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If this were the case global losses would be very much larger, and they would be borne primarily by third countries, including Europe and Australia.

One possible silver lining of this scenario for central banks would be inflation in the advanced economies like Australia, causing interest rates to rise. This would take pressure off the central banks, which have been struggling to prevent costly deflation.

While the US President continues to bring up a trade deficit with China as a concern, most economists agree that trade imbalances depend most on differences in saving rates.




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The US is threatened by the continuing rapid expansion of the Chinese economy and because US firms have to relinquish intellectual property in order to enter the large and growing Chinese market. The US also fears China’s move toward more sophisticated manufacturing and services under the “Made in China 2025” plan.

The ConversationWhether or not China and the US are successful in negotiating out of a trade war and restoring the integrated global economy, there will still be strategic tensions between the nations. These will create political pressure for stronger trade interventions in the future and will place countries like Australia at risk of substantial economic losses.

Yixiao Zhou, Lecturer in Economics, Curtin University and Rod Tyers, Winthrop Professor of Economics, University of Western Australia

This article was originally published on The Conversation. Read the original article.

Why China’s ‘debt-book diplomacy’ in the Pacific shouldn’t ring alarm bells just yet


Michael O’Keefe, La Trobe University

Talk of Chinese “debt trap” diplomacy is nothing new, but a recent report by Harvard University researchers has resurrected long-held fears that China’s debt diplomacy poses a threat to Australian interests in the Pacific.

The crux of the report is that Pacific island states like Vanuatu and Tonga, as well as other nations in Southeast Asia, are at risk of undue influence from China due to unsustainable loans they’ve received for infrastructure projects.

The Australian Financial Review quoted the report as saying that while Papua New Guinea in particular has “historically been in Australia’s orbit”, it’s been “rapidly taking on Chinese loans it can’t afford to pay and offers a strategic location in addition to significant LNG and resource deposits” for China.

The story follows a well-trodden path from speculation to suspicion to alarm. Last month, another media report emerged saying China had approached Vanuatu about building a permanent military presence in the South Pacific – an assertion Vanuatu quickly shot down.




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The latest report by the Harvard researchers comes with interesting context. A classified version of it was allegedly produced for the US Pacific Command last year, but the version leaked to the Australian Financial Review was written by graduate students, purportedly for the US State Department.

Interestingly, the students were supervised by Professor Graham Allison, who wrote the book Destined for War: Can America and China Escape Thucydides’s Trap?. The “Thucydides’s Trap” in the title relates to whether the US as a hegemonic power can accommodate China’s rise without resorting to war.

But this so-called trap does not necessarily point to historical inevitability. Therefore, a thorough analysis of the dynamics in the region is needed to fully understand China’s motivations, and what can be done to avoid conflict.

China has long been accused of using “chequebook diplomacy” to gain favour with nations around the world. The implication of the new “debt-book diplomacy” in the Harvard report is that China is using unsustainable loans to gain influence with Pacific island states that aren’t able to repay them.

Suffice it to say, this form of leveraging takes influence to a different level.

Historical fears

There is a long history of alarmism in Australia over the activities of strategic competitors in the Pacific. During the second world war, Japan was widely believed to have been poised to invade Australia from bases in the Pacific islands. This threat was later discredited, but the legacy of this fear of invasion from foreign powers lingers to this day.

During the height of the Cold War, Soviet fishing agreements with Pacific countries were also perceived to be a threat to Australian interests. These agreements were widely seen as strategic threats that could lead to military bases and/or spying arrangements, but nothing significant ever came from them.




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The constant in Australia’s geostrategic view of the Pacific is that the region is viewed simultaneously as both a buffer and a potential location of threats.

In the second world war and the Cold War, perceived encroachments by strategic competitors led to a “strategy of denial”. This involved creating a buffer through forward defence initiatives, such as the Pacific Patrol Boat Program, in which Australia donated 22 vessels to Pacific island countries at the same time the Soviets were negotiating their “fishing agreements”.

It might not be a coincidence this program has been reinvented with a new Pacific Maritime Security Program that will see 21 vessels delivered to Pacific island nations from 2018-2021.

Reassessing Australia’s role

Australia has also been the largest aid donor to the Pacific region, a position that has withstood recent increases in Chinese aid. Furthermore, this development assistance to the region was prioritised in the latest federal budget.

This is significant considering the relative sizes of the two economies and the relative ease with which China can allocate resources (without transparency and without regard to a domestic constituency scrutinising its actions). Presumably, China could very easily overtake Australia as the largest donor if it wanted to, and the fact that it has chosen not to is telling.

It’s true China is becoming more active in the region. Australia appears to be responding through development assistance, defence cooperation and emergency disaster response with its Pacific neighbours, even if there is speculation the US doesn’t believe it’s doing enough.

But if there is a genuine Thucydides’s Trap in the Pacific, what’s needed is a coherent analysis of China’s interests in the region, rather than a quick and almost reflexive interpretation of their intentions as aggressive. (One angle worth exploring its China’s ongoing conflict with Taiwan over diplomatic recognition for the self-ruling island, as six of Taiwan’s 19 supporters are in the Pacific.)

Of equal importance for Australia would be to understand the motivations of Pacific island nations. What’s missing is any examination of why Pacific states might be welcoming China with open arms, or even whether they are simply begrudgingly welcoming them.




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This opens a Pandora’s box. Could Australia’s (benign) neglect and perceptions of neo-colonialism actually be part of the problem? One that exists independently of China’s intentions?

This is certainly the case with [Australia’s sanctions against Fiji]from 2006-2014, which led to Fiji’s suspension from the Pacific Islands Forum and the creation of alternative forms of Pacific regional arrangements, such as the Pacific Islands Development Forum, which are supported by China.

The ConversationAustralia sees threats coming through the Pacific, and not from the Pacific, and this should be the foundation of its Pacific diplomacy. If Australia continues to reflexively see threats in China’s diplomatic moves in the Pacific, it may close off just the sort of creative diplomacy needed to escape a Thucydides’s Trap.

Michael O’Keefe, Senior Lecturer of International Relations, La Trobe University

This article was originally published on The Conversation. Read the original article.